‘Going once! Going twice! Sold!’ New conveyancing rules in force
Housing, specifically the purchase of, is a hot topic in the media, in politics and around your workplace water cooler. Most of us are fairly familiar with the steps involved in the purchase of residential property but what you may not be across are recent changes in conveyancing.
Under the new Conveyancing Rules lawyers and conveyancers are required to verify the identity of their clients, borrowers and anyone who is to be provided with a certificate of title. In addition, it must be confirmed that the person having their identity checked has the authority to deal with the land.
This is known as the Verification of Identity Standards (VOI) and it aims to standardise processes as part of the shift towards electronic conveyancing. NSW, Queensland and Victoria land registries have developed and adopted this process. VOI also aims to combat fraudulent activity.
Why the need for additional proof of identity?
The Real Property Act 1900 sets out that lenders must take reasonable steps to confirm the identity of a clients, borrowers and certificate of title recipients. Lenders are now considered to have taken reasonable steps if they have adhered to the VOI.
What is the process for verifying identity?
Individuals must participate in a face-to-face interview and provide at least two documents confirming their identity, such as a passport, driver’s licence or birth certificate.
You can attend your solicitor’s office for this interview or your post office. There are also great apps available to assist in the interview process.
Where a company is concerned, the existence and identity of the body corporate must be confirmed by search of ASIC’s records. Reasonable steps must be taken to establish who the person/s are designated to sign and/or witness the affixing of the seal on behalf of the body corporate and whether they are in fact authorised to undertake the role.
In instances where an attorney is involved in the execution, reasonable steps need to be taken to make sure that the conveyancing transaction is authorised by the power of attorney.
If those involved live overseas, the Department of Foreign Affairs and Trade has arrangements in place to verify their identity. These arrangements are consistent across all services provided by Australian Embassies, High Commissions and Consulates.
How long is the verification valid for?
The verification of identity is valid for two years however, lawyers must keep a secure electronic or paper copy of the verification of identity for seven years as evidence to supporting the dealing. This evidence should remain accessible and legible throughout the seven year period in case it needs to be produced as evidence.
What happens if you don’t comply?
The Registrar General has the power to reject any conveyancing transaction which doesn’t meet the VOI requirements. This may impact your ability to lodge any further documents relating to conveyancing transactions for up to 21 days. In addition, you may have extra conditions imposed to prevent further contraventions.
Following a transition period of three months, full compliance is now a requirement, as of 1 August, 2016.
If you’d like to know more about the VOI process, please contact our Conveyancing specialists in Parramatta, Norwest and Penrith: